Changing tracks: Examining VMware's evolving hybrid cloud strategy

VMware has long been one of the dominant players in the private cloud arena, and could even lay claim to have invented the concept as we now understand it.

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But the company’s efforts to expand into the public cloud have been less successful, prompting the firm to rethink its hybrid cloud delivery strategy, and sell-off its vCloud Air business.

VMware are renowned for being the firm that made virtualisation on x86 systems into a successful business model, before extending its technology into a platform for server consolidation and for standing up private cloud deployments.

When expanding beyond the enterprise datacentre into providing public cloud services of its own, VMware has been somewhat less successful.

Such offerings would appeal to organisations already running VMware in their own datacentre, and allow them to build a hybrid cloud strategy.

At least, that was the company’s theory, but the reality has seen VMware become the latest in a growing list of technology firms to realise that it cannot compete in the public cloud against giants such as Amazon Web Services (AWS).

In this respect, VMware is following the likes of Dell and Cisco, and HPE, the latter of which famously ditched its Helion Public Cloud just months after refuting reports that it was calling time on the offering.

“It has become apparent to these players that attempting to compete with the likes of AWS, Microsoft and Google at one end of the chain, and the dedicated smaller players at the other end of the chain, is a low-value strategy,” says Clive Longbottom, founder and research director of analyst firm Quocirca.

“Far better to focus on managing customer’s strategies around the hybrid cloud and implementing and managing orchestration layers across such a platform.”

Cloud Foundation brings together VMware’s vSphere, vSAN and NSX components into a unified software-defined datacentre (SDDC) stack that can be deployed on-premise in a private cloud or as a service from a public cloud.

This is already available from IBM’s SoftLayer cloud, and will soon be offered through others such as Rackspace and CenturyLink, and even AWS sometime in mid-2017.

The AWS offering – VMware Cloud on AWS – is notable because it will be delivered as a fully managed service, provisioned and supported by VMware, rather than AWS.

This possibly reflects VMware fears that it could lose that business to AWS unless it keeps a direct relationship with the customer, but also means VMware now has a global infrastructure it can use to serve customers – without the need to invest, build and manage it.

Cloud Foundation can also be deployed onto qualified hardware, such as VMware’s hyperconverged SDDC VxRack System from Dell EMC or a third-party system containing vSAN Ready Nodes and compatible network switches, to create a ready-built private cloud.

Common platform provider positioning

VMware is thus positioning itself as a platform provider for the public and private sides of a hybrid cloud architecture.

But experts will point out the real value of cloud is in the management layer, and this is where the rest of the Cross-Cloud strategy comes in.

This comprises a set of Cross-Cloud Services, still under development, that VMware will use to give customers greater visibility into the workloads running in their cloud ecosystems, so they can determine the best place to run them.

VMware already offers similar functionality in its vRealize management suite, but the recent acquisition of monitoring and analytics company Wavefront will enable it to beef up these capabilities.

The Cross-Cloud Services strategy is also expected to deliver tools that will allow customers to deploy workloads in more than one cloud, connect these up, and manage them on AWS, a vSphere-compatible cloud or some other platform.

Closing in on the competition

In some ways, VMware is following a similar strategy to rival Microsoft, which is readying its Azure Stack platform for release in summer 2017.

Azure Stack is essentially an on-premise version of the Azure public cloud that customers obtain pre-loaded on hardware from HPE, Lenovo, Cisco and Dell EMC.

Elsewhere, VMware had previously drawn flak for seemingly being stuck in the era of virtual machines, while the worlds of cloud-native apps and DevOps had sprung up around microservices, containers and the concept of operational agility.

VMware has begun to catch up, though. At the end of 2016, it finally released vSphere Integrated Containers (VIC) as a fully supported feature of vSphere, which allows customers to manage containers and virtual workloads in existing VMware environments.

This basically provides a Docker-compatible interface that provisions each container image as a small virtual machine.

VMware also has a second container platform called Photon. This is for cloud-native applications, and uses Photon Controller, a distributed controller and scheduler, in place of vCenter Server.

Photon was also given a major update at the end of 2016 with support for Kubernetes container orchestration, plus NSX and vSAN for network and storage support.

NSX is potentially going to prove a key technology for VMware in future. In the firm’s recently disclosed financial results, VMware forecast a $1bn run rate for NSX for the year ahead. This is despite industry criticism pertaining to the network virtualisation tool being, allegedly, buggy and immature.

Nevertheless, NSX is proving its worth to some customers for the ability to easily provision a network environment and protect workloads by isolating them in network segments protected by security policies.

VMware recently released an additional version, NSX-T, to expand the platform’s networking and security features to non-vSphere environments, starting with those using the KVM hypervisor, such as the Ubuntu and Red Hat Linux distributions, and clouds based on OpenStack.

Overall, VMware faces challenges ahead, not least of which is that the hypervisor and virtualisation are increasingly seen as commodities rather than key capabilities.

But ditching vCloud Air can be seen as a step towards a more coherent strategy that spans on-premise and public clouds, whether they are based on VMware technology or not.

There is also the fact VMware is able to draw on the resources of its Dell EMC parent to plug any gaps in its portfolio, such as the hardware platform for an on-premise private cloud.

Longbottom believes being part of the new, larger parent company could be an advantage for VMware in the long run.

“After the Dell acquisition of EMC, VMware has been left with a high degree of autonomy: it is the only publicly quoted part of the new federation, and operates pretty much outside of the overall control of Dell EMC,” he says.

“This made the decision to divest vCloud Air to OVH much easier – and is now allowing VMware to be a far more ‘open’ cloud company.”